BP Solar Manufacture of Renewable Energy Technology - Essay Example

? MANAGEMENT DECISION MAKING AND INFORMATION NEEDS: A CASE STUDY OF BRITISH PETROLEUM SOLAR By number and title> SALIENT FACTS ABOUT THE COMPANY: BP Solar is being operating in different sectors of renewable energy and is focusing on providing more green sources of energy for the customers. The company is operating successfully in many regions of the world. Apart from the business of renewable energy, British Petroleum (BP) is also operating in the sectors of exploring and producing gas and oil, constructing and mining, and manufacturing and transportation (Datamonitor, 2007). STRATEGIC DECISION TAKEN BY THE COMPANY: Strategic decisions are generally concerned with the overall policy or strategy of the organisation. These decisions are normally associated with relatively long term and involve high risk. At the same time the results related with strategic decisions are unpredictable and have huge influence on the stakeholders of the company (Ford, Sharfman, & Dean, 2008). The strategic decision taken by the BP Solar Global is to expand the operations of the business in new geographical markets. This will facilitate the company in the process of increasing the sales growth and market share. In this regard, BP Solar can enter into growing solar panel industry at UAE and Middle East. Company is already operating in different countries of six continents, namely Africa, Asia, Australia, Europe, North America, and South America. TACTICAL DECISION TAKEN BY THE COMPANY: Tactical decision are normally associated with medium term and are supported by considerable quantitative data and information. Apart from this, tactical decisions have relatively low amount of risk as compared to the strategic decisions (Keskin, Uster, & Cetinkaya, 2010). The tactical decision taken by the company is the implementation of the Total Quality Management and Lean Six Sigma in the next six months. This will enable the company to improve the quality of the overall process of production and manufacturing. This decision will help the company in the process of providing sustainable green energy to the consumers. Along with this, the implementation of the Total Quality Management and Lean Six Sigma will facilitates the organisation in the process of continuous improving the overall operations. OPERATIONAL DECISION TAKEN BY THE COMPANY: Operational decisions include the day to day basis routine activities and tasks. These are of the least complexity and low risk is associated with them. Apart from this the level of information required for these decisions is generally very low and these decisions are made on the basis of experiences (Xu & Birge, 2008). The operational decision taken by the company is to send some of the members of research and development department to a one month learning and training course. Being in the highly innovative industry it is necessary for BP Solar to keep on coming with different innovative products and solutions. This can be achieved by training and developing the research and development personnel. INFORMATION NEEDED FOR TAKING STRATEGIC DECISION: In order to decide for expanding into other geographical regions, company will be requiring different important information and data. The different set of information required for this strategic decision are: 1. Current market condition along with future growth potential 2. Current political and legal condition of the new geographical market Current Market Condition and Future Growth Potential: First of all the current condition of the new target market along with the future growth potential will be required. According to the report of Datamonitor (2010), there is high potential in the renewable energy industry in United Arabs Emirates (UAE). Particularly, the industry of solar panels has been showing considerable growth. It is highly beneficial to enter into this region because of the unlimited supply of the sunlight (Datamonitor, 2010). Current Political and Legal Condition of the New Geographical Market: Before deciding to enter into new geographical market it is important to investigate and analyse the political and legal environment of that particular region. It is relatively difficult for the foreign organisations to setup a business unit in United Arab Emirates (UAE) and other Middle East countries. It is necessary for the international company to enter into alliance or partnership with some local company in this regard. Apart from this there are several other legalities involved in the process of establishing a business unit in United Arab Emirates (UAE). Despite of all these issues and restrictions, the government of United Arab Emirates (UAE) is providing different opportunities for the foreign investment like establishing tax free zones (Datamonitor, 2011a). INFORMATION NEEDED FOR TAKING TACTICAL DECISION: In order to go for the implementation of the Total Quality Management and Lean Six Sigma, the company will required to first analyse some relevant information. In this regard, the information required by the organisation can be divided into two broad categories: 1. Information about the internal processes 2. Information about the external environment Information about the Internal Processes: Before taking the decision for the implementing the Total Quality Management and Lean Six Sigma approach it is important to obtain information about the internal processes of the organisation. This will enable the organisation to assess the current wastage level and the amount of improvement needed. Information about the External Environment: Apart from this the information about the external environment is also important for the process of implementing the Total Quality Management and Lean Six Sigma. The organisation should benchmark the organisation in the industry which is providing high quality results and take decisions accordingly. INFORMATION NEEDED FOR TAKING OPERATIONAL DECISION: The information which will be required by the organisation in order to decide for the training and development of the research and development personnel is the current competency level of these personnel as compared to the required level of competency. Apart from this, information about the standard of the training and development courses will also be required. EXAMPLES OF COMPETITOR INTELLIGENCE: It is important to analyse the strategies and activities of other competitors in the industry. In the year 2010, the international market of renewable energy reported a growth of around 6.8 percent (Datamonitor 2011b). This means that different companies are working hard to capture considerable market share in the industry. Owing to the innovative nature of the industry, most of the competitors in the industry are opting for gaining patents related to the different technologies and methods. In this regard, SustainX recently received US patent for technology for the process of turning waste energy into electricity (Datamonitor, 2011c). Similarly, there are several companies like Chevron Corporation and ExxonMobil Corporation which are into the process of coming up with new strategies and obtaining patents for them. Apart from this another competitive intelligence in this regard is the increasing focus of Shell Oil Company on the sustainable and green energy. The company is taking different measures in this regard and is attracting more customers on the basis of being more environmental friendly. Shell Oil Company has come up with long term plan for the providence of green and sustainable energy to the customers (Datamonitor, 2011d). Owing to the increasing focus on the renewable energy, the European Utilities are coming up with different strategies and tactics in order to capture considerable market share in this industry. For this purpose, due advantage is being taken from the different domestic and local government support. This is helping the European Utilities in the process of coping up with the different rules and regulations (Datamonitor, 2008). RELEVANT ITEMS OF MARKET RESEARCH: The three important or relevant items of market research which will be helpful for the BP Solar company are: 1. Customer preferences 2. Demand of different products 3. Economic condition List of References Datamonitor 2007, Company Profile: BP Plc. Available from http://favormall.net/clientimages/38996/oilleadcomp-bpplc.pdf [Accessed 27 November 2011] Datamonitor 2008, The Rise of Renewable Energy Strategies amongst Major European Utilities. Datamonitor Business Information Center Datamonitor 2010, UAE stepping into the green zone. Available from http://www.datamonitor.com/store/News/uae_stepping_into_the_green_zone?productid=A4CA53B3-88C0-4543-B511-9B04274DD3A9 [Accessed 27 November 2011] Datamonitor 2011a, Country Analysis Report: United Arab Emirates – In depth PESTLE insights. Datamonitor Business Information Center. Datamonitor 2011b, Renewable Energy: Global Industry Guide 2011. Datamonitor Business Information Center Datamonitor 2011c, SustainX Receives US Patent for Technology to turn waste energy into electricity. Available from http://www.datamonitor.com/store/News/sustainx_receives_us_patent_for_technology_to_turn_waste_energy_into_electricity?productid=0AE620C4-04D4-4B44-BDE4-E2BD4BAB70EA [Accessed 27 November 2011] Datamonitor 2011d, Shell Oil Company: Company overview. Datamonitor Business Information Center Ford, C, Sharfman, M, & Dean, J 2008, ‘Factors associated with creative strategic decisions’, Creativity and Innovation Management, vol. 17, no. 3, pp. 171-185. Keskin, B, Uster, H, & Cetinkaya, S 2010, ‘Integration of strategic and tactical decisions for vendor selection under capacity constraints’, Computers and Operations Research, vol. 37, no. 12, pp. 2182-2191. Xu, X, & Birge, J 2008, ‘Operational Decisions, Capital Structure, and Managerial Compensation: A News Vendor Perspective’, The Engineering Economist, vol. 53, no. 3, pp. 173-196. Read More